Anyone making decisions for millions or billions of endowment dollars should be able to decipher what is/is not a "cost" and be able to make the proper adjustments to the misleading performance figures provided by these managers. Everything that ends in "cost" or "expense" is obviously a cost, if they can't figure that out or they're blissfully unaware of this they're just hopeless.

I don't really blame the managers who are giving out performance figures gross of all fees though, even if it's dishonest, misleading, and overall just not a good reflection on the investment industry. They're going to make their performance look as good as they can LEGALLY. Whoever is responsible for regulating these managers, and what they're forced to include in their performance numbers are ultimately responsible for this tragedy of logic.

If excluding costs/fees from performance were illegal, this problem would cease to exist. But these managers want their bonuses and they like their jobs and they're going to make themselves look as good as they can while not violating the law.